Craig Eisele on …..

July 17, 2007

Mbeki “Lectures” on African Unity and Integration.

In Defence of Yar’Adua’s Speech – Unity And Integration in Africa

Vanguard (Lagos)
DOCUMENT
17 July 2007
Posted to the web 17 July 2007

By Thabo Mbeki

A LECTURE DELIVERED BY THE PRESIDENT OF SOUTH AFRICA, THABO MBEKI, AT THE UNIVERSITY OF CAPE COAST, GHANA, 4TH JULY 2007:

Guy Arnold observes in is book: Africa – A Modern History, that: “At the beginning of the 1960′s, Africa was the world’s most precarious region, its vast geographic centre was ‘empty’ of power, its northern and southern extremities (Algeria and South Africa) in the grip of forces that appeared irreconcilable to the rest of the continent. Its newly independent States with their fragile infrastructure and miniscule economies desperately required help, but help that would not be accompanied by political demands and ‘strings’. Political power depends upon economic strength, and economic strength was what Africa lacked. There were also complex psychological problems associated with independence: African nationalist leaders had to demand and take independence, they could never appear just to receive it. Moreover, the scars of colonialism ran deep for, as Nigeria’s Dr. Azikiwe had said back in 1948: ‘My country groans under a system which makes it impossible for us to develop our personalities to the full.’ And, as another young nationalist said to a European at this time: ‘You have never known what it is to live under colonialism. It’s humiliating’.” (P55, ibid)

Indeed, the former colonial powers were not prepared to let Africa find a development path on her own. In the midst of the Cold War, the western countries, unashamedly and unapologeti-cally, interfered and intervened directly in the internal affairs of independent African countries, resorting, in some instances, to violence and assassinations of those deemed to be against their interests.

Thus, neo-colonialism was not merely a descriptive political term but an actual lived experience of many Africans who had to content with this new insidious, but, still deadly phenomenon.

The fragile infrastructure and miniscule economies that Arnold talks about meant that many African countries were forced to agree to economic aid measures which were, however, accompanied by political demands and manipulations as well as both political and economic strings, which, in some instances, had invariably defined the destinies of some of our countries. Those African leaders bold enough to refuse these forms of neo-colonialism became the targets of the powerful nations of the North and their collaborators on the continent. It would, indeed, be disingenuous to suggest that the same phenomenon is non-existent today.

By the end of the 1970′s, a number of African States had tried, with less success, to take full control of their economies. At this period, many African countries were faced with adverse terms of trade, rising debt, poor and deteriorating infrastructure as well as declining economies. As a result, these countries sought more aid, got into more debt and found themselves increasingly at the mercy of former colonial powers.

Undoubtedly, the western powers liked what they saw because there were limited possibilities for African countries to escape their economic stranglehold.

Clearly, the problems experienced by African States, between the 1960′s and the 1980′s, stem from a number of factors, which include:

The emergence of neo-colonialism which meant few African countries could independently embark on any political and economic development route outside those designed, approved and managed by the erstwhile colonial powers;

The Western powers never envisaged independent African countries to decide their own development paths, rather, they sought to create dependent client States which could be manipulated according to the strategic and economic requirements of these western countries;

Through a number of measures, both political and economic, former colonial powers maintained their ‘spheres of influence’ consistent with old colonial divisions, hence, the zoning and entrenchment, thereof, of our continent as Anglo-phone Africa, Franco-phone Africa and Luso-phone Africa.

The weak and fragile economies of the newly independent countries left them vulnerable to the variety of political mechanisations of imperial powers;

The coincidence in the 1960′s, of the advent of African independence, with African States still being weak, and, the height of the Cold War, made it possible for new actors to enter the African scene in the form of the USA and the USSR. These two powerful players used the continent as one of their sites for their global confrontations at the time when the continent was trying to shake-off the shackles of colonialism. Today, the lives of many Africans attests to the fact that the wounds of those Cold War confrontations are yet to heal;

The colonially-imposed boundaries became fetters in the processes of nation-building, serving as flashpoints of internal conflicts and instability as well as fuelling inter-states conflicts;Debt, aid, manipulations by aid donors and unfavourable trade terms, especially for exports, falling agricultural outputs, natural disasters and others, became an albatross on many African countries;

Conflicts, wars, military interventions and autocracy became widespread, supplanting democracy.

World recession in the 1980′s had a negative impact on the continent’s weak economies;

Economies became either stagnant or declined during this period.

Clearly, for three decades, the combination of these negative factors conspired to deny our countries, individually and collectively, the possibilities of development and economic growth and, thereby, postponing the attainment of a better life for millions of Africans. Unity and integration, as envisaged by Nkrumah, could not happen under these conditions.

It is clear, then, that there are a number of conditions necessary for the attainment of the higher level of unity and integration of Africa. One of these conditions is that all of Africa had to be free. However, with many parts of the continent not free, even in the1970′s, especially most of southern Africa, the matter of integration became practically feasible only in the last decade of the twentieth century.

Chairperson,

In 1991, 51 independent African states gathered in Abuja, Nigeria, to establish the African Economic Community (AEC) as an integral part of the OAU. The following are the objectives of the Community:

To promote economic, social and cultural development and the integration of African economies in order to increase economic self-reliance and promote an endogenous and self-sustained development;

To establish, on a continental scale, a framework for the development, mobilisation and utilisation of the human and material resources of Africa in order to achieve a self-reliant development;

To promote cooperation in all fields of human endeavour in order to raise the standard of living of African peoples, and maintain and enhance economic stability, foster close and peaceful relations among Member States and contribute to the progress, development and economic integration of the Continent; and

To coordinate and harmonise policies among existing and future economic communities in order to foster the gradual establishment of the Community.

To realise these objectives it was agreed that, among others, the existing economic communities will be strengthened and new ones established; agreements would be finalised with the aim of harmonising and coordinating policies among existing and future sub-regional and regional economic communities.

Further, there would be the liberalisation of trade through the abolition, among Member States of Customs Duties and Non-Tariff Barriers so as to establish free trade areas in each regional economic community.

The countries also agreed to adopt a common trade policy, ensure a common external tariff and establish a common market. Of importance, there was to be a gradual removal, among Member States, of obstacles to the free movement of persons, goods, services and capital and the right of residence and establishment.

The 51 African countries then agreed to implement these and other decisions in six stages over a transitional period of 34 years.

The First Stage of a period of five years, for instance, was for the strengthening and establishment of regional economic communities. The Second Stage of eight years was to deal among other things, with the gradual removal of tariff barriers and non-tariff barriers and gradual harmonisation of customs duties.

Then, the Third Stage of ten years had to deal with the establishment of Free Trade Areas while the Fourth Stage of two years would address the harmonisation of tariff and non-tariff systems among the various regional economic communities with a view to establishing a continental Customs Union by means of adopting a common external tariff.

The Fifth Stage would establish an African Common Market for a period of four years and also include the harmonisation of monetary, financial and fiscal policies as well as ensuring the free movement of persons.

The Sixth Stage of five years would be used for the consolidation and strengthening of the structures of the African Common Market, the integration of all sectors, namely economic, political, social and cultural; the establishment of a single domestic market and a Pan-African Economic and Monetary Union, the establishment of a single African Central Bank and the creation of a single African Currency. This Stage would also see setting-up of the structure of the Pan-African Parliament and election of its members by continental universal suffrage.

Of course, as we have seen with the matter of the establishment of the Pan-African Parliament, some of these processes may in fact come earlier than envisaged. But a review of the various regional economic communities (REC’s), which are the building blocks of our integration, will reveal that some of our regions have not advanced beyond the first stages identified by the prescriptions of the African Economic Community (AEC) as outlined in the Abuja Treaty.

For instance, there is uneven development of the REC’s, resulting in some of these bodies being unable to implement the prescriptions of the Abuja Treaty. Accordingly, it would be difficult to argue successfully that we have strengthened all the REC’s.

The Economic Community of West African States (ECOWAS) has made remarkable progress on many of the prescriptions of the African Economic Community. The region has signed a protocol on free movement of persons including the abolishment of visas for citizens of ECOWAS; has approved the free movement of goods, established an ECOWAS common external tariff, removal of all non-tariff barriers of a monetary nature and introduced the ECOWAS travellers cheque. So clearly, this is great achievement in the direction of integration.

My own region, the Southern African Development Community (SADC), which has not achieved as much as ECOWAS, has adopted an overall strategy so as to realise the lofty vision of the African Economic Community as contained in the Abuja Treaty. SADC has adopted the Regional Indicative Strategic Development Plan as well as Strategic Indicative Plan for the Organ on Politics. These two strategic plans are consistent with the vision of continental integration and focus on policy harmonisation as directed by the Abuja Treaty and help with the acceleration of SADC integration agenda.

There are views that, because we have difficulties in implementing the Abuja Treaty, we should abandon our attempts to strengthen the building blocks of our integration and go straight to integrating at continental level. I must say, I have never heard of a builder who abandons the foundation and start with the roof of a house because the building site is full of rocks.

Further, it is clear that the African countries that met in Abuja, Nigeria in 1991, understood very well that integration should happen hand in hand with development. Hence, the emphasis on drawing programmes aimed at the facilitation of better economic activities and the removal of barriers to economic growth and development.

Accordingly, integration is a means through which all Africans should and must collaborate to harness diffused energies and competencies, utilise our vast natural resources and internal economic strengths so as to give our continent a comparative and competitive advantage in the world market.

Because our individual economies are small, our hope for a better market share in the global economy lies in our combined efforts. That is why the Abuja Treaty is such an important benchmark which we should use as we address the many prescriptions it contains among which is the urgent challenge of strengthening regional economic communities.

Clearly, the integration of Africa will be easier and faster when we have, among others, dealt with the many challenges identified by the Abuja Treaty because this is a Treaty drafted from the practical experience of the African people and expressed by a leadership that is undoubtedly committed to the integration of Africa.

If we are to look at the experience of European integration we will realise that part of the challenge faced in this process of integration was to address underdevelopment. Accordingly, the European Union (EU) set up what they called Structural Funds to give financial support to under-developed and economically weak EU regions and countries.

These Structural Funds comprised of the European Regional Development Fund (ERDF), European Social Fund (ESF), European Agricultural Guidance and Guarantee Fund, Pre-Accession Aid and the Cohesion Fund. Between them, they now make-up a major part of the EU budget.

Through these Funds, the EU has managed to help with the further development of the economies of countries such as Spain, Portugal, Ireland and Greece as well as the poorer regions of countries such as Sweden and England.

Clearly, Africa is different from Europe in many respects, especially with regard to their respective economic development.

Today, the annual budgets of many African countries are made-up mainly of foreign aid money. Usually, as we know, the donor countries exert pressure on the recipient countries to pursue particular policies.

In this regard, the question that Africans should ask is: what impact will the donor-recipient unequal relationship impact on our process of integration. Will we achieve an integration that benefits the ordinary people of Africa, or would this process ensure easy control of Africa by powerful nations since these outsiders had an influence on the integration path of the continent.

However, these are challenges, which we cannot avoid but should be examined fully and honestly by all of us. Whatever difficulties we encounter we should not lose sight of our main objective of unity and integration. Accordingly, at all times we should consistently and faithfully pursue the prescriptions of the Abuja Treaty and the objectives of Constitutive Act of the AU, develop our economies and ensure that integration and development proceed side by side.

Chairperson,

Some observers talk about the coincidence of historical processes represented by the adoption of the Abuja Treaty with the evolving of a very important era in modern African politics, represented by an unprecedented democratisation process and the deepening of that democracy by measures taken by Africans themselves with the participation of the masses of our people.

Although in the 1990′s our continent still experienced a number of wars and conflicts, the decade was characterised more by the return of democracy to many countries such that by the end of the decade, multi-party elections and democratic governments were more a norm than an exception. At this period, with the exception of the Western Sahara, all of Africa was free.

The economies of many of our countries were beginning a process of recovery, registering better rates of growth than had been the case for almost three decades. The masses of our people were themselves, in the midst of socio-political changes, redefining their role in society, away from the docile and pliant citizens to being active agents of change.

Emboldened by these developments, we made bold to declare the 21st century an African Century where our collective energies, the processes and programmes that we have adopted would defeat the wretched conditions of the African people as they confidently march towards a prosperous future.

We entered the new century having transformed the OAU into the African Union and adopted its development programme, the New Partnership for Africa’s Development. Many of the NEPAD programmes are being implemented and because we are dealing with a century-old colonial legacy, it will obviously take years for some of these projects to begin making a visible impact on the lives of our people. But the indisputable fact is that: we are on the march!

On Sunday, in Accra, we launched the Pan-African Infrastructure Development Fund – part of the NEPAD initiative – with the governments of South Africa and Ghana, as well we African Development Bank playing a central role together with private sector financial institutions from our continent.

We are indeed happy that the launch of this Fund, starting with an initial amount of US$625 million took place when Africa is celebrating Ghana’s 50th anniversary of independence.

The Fund, which will invest mainly in four key areas of Energy; Transport – including rail, roads, ports and airports; Telecommunication; and Water and Sanitation will clearly have a positive impact on the lives of many people.

We are happy that the initial investors are from Africa because they have demonstrated, in a practical way, that we as Africans have both the determination and the ability to meet the challenges facing our continent. As we embark on the projects identified by this Fund, we will need the skills of people such as these that have gathered at this university because we obviously need a lot of expertise to build infrastructure on our continent.

We will also need our brothers and sisters who are in the Diaspora to be part of this initiative as well as the hundreds of thousands of the skilled Africans who left the continent during the difficult years of the past.

In this regard, we have a duty to strengthen our universities, ensure that they have requisite resources to produce graduates with high kills and attract back into the continent, thousands of those skilled Africans who left for the developed countries. This is part of the building blocks that we must use to attain the important steps identified in the Abuja Treaty for our integration. We may not have the billions the EU has in its Structural Funds, but African initiatives such as the Infrastructure Fund affords us the space, among others, to ensure that Africans own their assets and we are able to determine our own loan terms that will help develop our countries rather than put debt albatross in the necks of succeeding generations of Africans.

Dear friends,

In one of the epic dialogues of his latest masterpiece, Wizard of the Crow, the Kenyan writer and thinker, Ngugi wa Thiong’o, has this line of thought:

“Why did Africa let Europe cart away millions of Africa’s souls from the continent to the four corners of the wind? How could Europe lord it over a continent ten times its size? Why does needy Africa continue to let its wealth meet the needs of those outside its borders and then follow behind with hands outstretched for a loan of the very wealth it let go? (p681 wa Thiong’o, Ngugi, Wizard of the Crow, 2006, Harvill Secker, London).

The pathos embedded in our history as captured in this moving dialogue invokes the need for Africans to look hard at the mirror of history and at the challenges entrenched in the womb of the present.

We have already started this irreversible process to redress the failures of history. We dare not fail!

Chairperson,

The AU Ordinary Session to which I referred at the beginning and which was ably chaired by President Kufour, adopted the important Accra Declaration. We agreed to accelerate the economic and political integration of Africa and move towards the formation of a Union Government with a view to ultimately realise the objective of the United States of Africa as envisaged by the founding fathers of the Organisation of African Unity, and in particular, the visionary leader, Dr. Kwame Nkrumah of Ghana.

The meeting recognised the need for common responses to the major challenges of globalisation facing Africa and boosting regional integration processes through an effective continental mechanism. We also agreed to open-up narrow domestic markets to greater trade and investment through freer movement of persons, goods, services and capital so as to accelerate growth an reduce weaknesses of many of our Member States.

Further, the meeting also recognised that the Union Government should be built on common values that need to be identified and agreed upon.

In all these processes, it is agreed that the African peoples should be involved in order to ensure that the African Union becomes, in reality a Union of peoples and not just a ‘Union of states and governments’. Both these masses of our people as well as the African Diaspora should be involved in the processes of economic and political integration of our continent.

Chairperson, if we implement fully all these decisions that will clearly advance our processes of integration and development then we will have the right to say to Ayi Kwei Armah that indeed the beautiful ones are now being born!

NOTE BY CRAIG EISELE:

    I hope that President Mbeki has been apprised of the Trans African Development Company project plan for Africa… it seems we share some of the same visions.  

Senegal Minister: Africa “Will NOT Be the Winner” of EPA Negotiations!

Continent ‘Will Not Be the Winner’ of the EPAs

Inter Press Service (Johannesburg)
NEWS
17 July 2007
Posted to the web 17 July 2007

By Hamadou Tidiane Sy
Dakar
“I do not know if a winner will emerge from the signing of the economic partnership agreement under the current conditions but I know for sure that Africa cannot be the winner,” says Amadou Ba, who heads the international negotiations division at Senegal’s ministry of commerce.

Speaking to IPS in Dakar, Ba, who has been involved in the economic partnership agreements (EPA) talks at national and international level, raised a number of critical issues to support his view. These were similar to those expressed by African civil society organizations when they met in Accra, Ghana, at the end of June just before the African heads of states summit this year.

Senegalese experts and civil society activists say that signing the EPA would mean lifting all trade barriers to European products entering the markets of the African, Caribbean and Pacific (ACP) countries, and they fear the negative impact of such a decision.

Senegal is not negotiating with the European Union on its own but rather through the regional bloc of the Economic Community of West African States (ECOWAS). A national committee has been set up to follow up the negotiations and prepare national positions to submit to ECOWAS.

The committee is composed of government representatives, civil society leaders and businesspeople.

“It would be a deadly error to repeat the mistakes made by our predecessors,” Ba said, partly in reference to those who negotiated African states’ entry into the World Trade Organisation (WTO).

The Senegalese and other West African governments are demanding that the EU agree to a three year moratorium to prepare the ground for the EPAs and to help the African states and companies to improve their ability to face up to the stiff competition which will come in the wake of the EPAs. ACP countries already have access to the European markets for up to 97 percent of their products under current trade arrangements, so any change to the trade regime will only profit the EU countries and their enterprises, Ba explained.

Civil society organizations have launched a national campaign with the theme “Stop the EPAs”. “Signing the EPAs will create various shocks to this country’s economy”, according to Mame Mignane Diouf, coordinator of the Senegalese Social Forum, an anti-globalization movement.

He spoke to IPS a few days before heading a demonstration aimed at blocking the agreements from being signed.

Organized on July 11, this demonstration took a handful of protesters to the heart of the Senegalese capital for a march which ended at the ministry of commerce where they handed over a document demanding a total rejection of the EPAs.

The first and most dramatic shock to Senegal will be the loss in terms of the national budget. Senegal, Diouf explained, could see its national budget fall by up to 10 percent due to a drop in revenue caused by the EPAs.

The second shock will be to the “agricultural sector and the already frail industrial sector” of the country, which will die when faced with direct competition from big western companies.

Yet, the EU has offered to “help” support local industries and companies to prepare for the competition once the EPAs are signed, Louis Michel, EU commissioner for development, has said in various capital cities around the African continent.

Michel has insisted that there is no way the December 31 deadline can be missed. From the EU’s vantage point, Europe has already given “everything it can”. Recently in Accra he accused the civil society organizations leading the campaign for not having a “proper understanding” of what the EPAs are all about.

The EU has supplied some support even before the controversial agreements have come to fruition. But the big question is: Is it enough? Will it be of any use in the end?

In Senegal this advance support is done through the French Agency for Development (AFD) which has set up a national programme to help strengthen the local economy and particularly the private sector in terms of infrastructure improvement, capacity building and so forth.

But the results are not visible yet and the business community is equally worried, even though they have declared that they do not have the same objectives and the same approach as the civil society organizations.

“These organizations are in the field of anti-globalization and are saying ‘no’ to the EPAs while we are fighting for the survival of our businesses,” Yousou Diop, deputy director at the nongovernmental National Council of Senegalese Employers, told IPS.

“It is true we are not ready yet and we have serious concerns,” he adds, explaining that even in five years or more, local companies will not have reached the level of competitiveness required to compete with the huge European multinationals.

For the business community, the local private sector needs “more time” to get ready and be able to face the new challenges to be introduced by the EPAs. Otherwise, they claim, the whole Senegalese economy will collapse. As will those of other ACP countries.

Civil Society Advocates Further Liberalisation of AGOA

Civil Society Advocates Further Liberalisation of AGOA

Ghanaian Chronicle (Accra)
NEWS
17 July 2007
Posted to the web 17 July 2007

By Joseph Coomson

As the 7th Africa Growth and Opportunity Act (AGOA) summit is in progress, civil society organizations from the United States of America (USA) and Africa in a parallel Summit have called on the US Authorities to further liberalize their market and extend the number products under AGOA for Sub-Sahara Africa (SSA).

Although AGOA added 1,835 products in all to the 4,650 already enjoyed preferential access under the General Systems of Preferences (GSP), they are not far-reaching enough because some products of critical importance to SSA are excluded from the trade preference. Also, the participants at the 6th AGOA Civil Society Forum in Accra dubbed “Optimising benefits under AGOA” noted that preference margins are low and there are significant tariff peaks on the products liberalized under AGOA already enjoy duty and quota-free access under the GSP.

“There is a consensus that AGOA could be more liberal to African countries,” the Coordinator of the Third World Network (TWN), Dr. Yao Graham said.

According to a presentation by Patrick Opoku Asuming of the Political Economy Unit of the TWN, in the case of agriculture products, only 26 additional tariff lines are liberalized for Less Developed Countries (LDCs) under AGOA whiles for non-LDCs, AGOA adds 541 products to the 519 under the GSP. He stated that there are still over 200 agriculture tariff lines or 17% of total number of dutiable agriculture tariff lines with no preference under AGOA or GSP.

The average tariff on these remaining products is higher than those liberalize under AGOA preference margin for under AGOA is 7.7% while the average duty on products excluded are more than 30%.

Secondly, Mr. Asuming stressed that market access in itself does not necessarily leads to export growth. Over three decades of preferential trade arrangements with the EU and African Caribbean and Pacific (ACP) group under the Cotonou Agreement and Everything But Arms have not resulted in significant export growth to the EU market. “This is partly due to the restrictive rules of origin and the presence of Non-Tariff Barriers”.

However, his presentation said the structural constraints to production such as weak distribution networks and communications and transport infrastructure are the main reasons and therefore, market access not accompanied by measures of addressing the supply-side constraints is likely to result in expansion of exports.

On his part, Dr. Yao Graham said the forum will work on a common position to lobby governments including that of the USA to press the case that the mighty USA should liberalize more in terms of access to African products.

“As of now, 95% of the goods entering the USA under AGOA are petroleum products. “Nigeria alone accounts for 71% of agoa products entering the US. So the expectation that it creates the opportunity for manufactured export to the USA has not happened,” he reiterated.

He said the structure of African exports to the US has not changed although some countries have varied their exports such as Kenya. On Ghana, he said Ghana should look at the reasons why they can not match supply to the demand in the USA.

Dr. Yao Graham and Vernie Guthrie of the Leon Sullivan Foundations gave the key note addresses. The chairman for the occasion was Augustine Adongo of the Federation of Ghanaian Exporters.

EU Touts CEMAC Progress Through EPA’s for the Central African Economic and Monetary Community.

CEMAC-European Union – Giant Step into the Open Market

Cameroon Tribune (Yaoundé)
NEWS
17 July 2007
Posted to the web 17 July 2007

By Lukong Pius Nyuylime

Doubting Thomases were yesterday made to understand that the opening of the frontiers in 2008 when the World Trade Organisation-driven Economic Partnership Agreement goes operational will not be a fatality for the Central African Economic and Monetary Community.

Meeting five months after the Brussels confab which gave orientations on how best to prepare for the Economic Partnership Agreement prior to the end of 2007, members of the delegation of the two partners under the co-chair of EU Commissioner, Peter Mandelson and Polycarpe Abah Abah, president of the CEMAC Council of Ministers, made significant step into their negotiations.

The peculiarity with the Yaounde negotiations was the manifestation at the entrance to the Hilton organised by the civil society to express its indignation to the EPA. But the two European Commissioners, Peter Mandelson and Louis Michel respectively, European Commissioners for Trade and European Commissioner for Development and Human Aid, readily dismissed fears that breaking tariff barriers in 2008 would tantamount to completely destroying the existence of custom duties. “These are not Free Trade Agreements in the way anyone understands that term. They are development tools. Trade and aid working together to deliver sustainable growth and prosperity for Central Africa”, Peter Mandelson said.

In the same vein, Louis Michel underscored the fact that all steps are being taken at the level of the donors to attenuate the effect that could be brought by the EPA. It is for this reason that the tenth European Development Fund (FED) will witness a 35 % increase for the sub-region. As far as Cameroon is concerned, there will be a 100 % increase, he said.

At the joint press conference that followed the meeting, the four orators, Peter Mandelson, Louis Michel, Polycarpe Abah Abah and Luc Magloire Mbarga Atangana, reiterated the fact that the EPA has not come to usher in an abrupt complete destruction of tariffs. “There will be flexibility to deal with your sensitivities, to provide continued protection while opening in those areas which will pump economic oxygen into your economies”, Mr Mandelson said. They all agreed that the opening of the market will be progressive but did not say for how long the progressiveness will last.

However, pressmen were told that some priority sectors have been identified to benefit from the agreement. These include: basic infrastructure, agriculture, competitiveness, and improving the business climate. CEMAC will fix its own priorities and a regional fund will be created to finance the EPA. The negotiations will continue in October in Brussels to measure the progress made and probably fix the date of the signing of the agreement.

8 BILLION Dollars of Power Investments Planned for Nigeria

Investors to Sink $8 Billion into New Power Projects

Vanguard (Lagos)
NEWS
17 July 2007
Posted to the web 17 July 2007

By Hector Igbikiowubo

INVESTORS are working out financing arrangements to sink $8 billion into new power projects capable of generating some 8000 Megawatts (Mw) of electricity – part of a wider plan to address perennial supply.

The National Electricity Regulatory Commission (NERC) has also disclosed it is working on fresh incentives to attract investment in the development and construction of independent power plants.

Dr. Ransome Owan, Chairman of the NERC made the disclosure while briefing newsmen in Lagos recently, explaining that based on the number of licenses issued to investors, 8000 Mw is expected to be generated.

“Based on the number of licenses issued so far, the quantum of electricity to be generated is about 8,000MW of power. By our standards, every 1,000MW costs a billion dollars. So the 8,000MW is equivalent to $8bn worth of investment.

“If you use the exchange rate of N130 to $1, it would amount to over N1.04trn. so that is the investments that Nigerian companies are willing to put up to help us solve the power problems.”

He pointed out that the Commission is currently reviewing new applications which relate to alternative sources of power supply such as coal, wind and solar energy.

“On Friday; an application came in for a coal power plant in Enugu. So we are having expression of interests in alternative power, which includes wind power and solar energy. Although the latter have not formally come to us but we believe in the near future, our energy mix will be improved.

“I believe we need to improve on our energy need other than hydro and gas to coal power, wind power and other renewable such as solar to improve our energy mix and energy security.”

Dr. Owan, an American trained technocrat of no mean repute also disclosed that in line with plans to attract more investment into the sector, the Commission is considering tax holiday of sort as well as floating a utility bond on the stock market which investors could have access to at very low interest rates.

“We are doing a number of things to support our IPPs. One of them is, we are coming up with a package of incentives, which includes tax holidays, customs, importation of spare parts, even intellectual property that they would need, techniques, which would help them reduce their tax burden and give them some tax breaks.

“The second area that we are working on is to try and come up with a power utility bond, that we can introduce into the capital market that would allow the Nigerian population and institutional investors such as PENCOM and estate managers and other hedge funds managers and use them as utility bonds and help us provide more money for the sector.”

Dr. Owan noted that power was a capital-intensive industry and that investors were finding it difficult accessing funds from financial institutions to execute power projects, adding however, that with such utility bonds, which would be backed by the Federal Government, it would be easier to attract more investments and attain set national power goals.

“If power has debt equity involved, there is plenty of debts, but there is lack of equity, and if we trade the power utility bond and it is backed by the Federal Government, we can use that as an instrument to leverage and get private investors and PENCOM to buy these bonds and give us the money in naira, and our IPPs can access that money at a lower interest rate that is currently possible, and that would help to reduce transaction cost,” he said.

Dr. Owan disclosed that the Commission has opened discussions with sister government agencies including the Security and Exchange Commission (SEC), the Central Bank of Nigeria (CBN), the Ministry of Finance, the Federal Inland Revenue Services (FIRS) and the National Assembly.

He said these are stakeholders which have to support the plans of the Commission if it was to succeed in attracting investment to the power sector within the shortest possible time.

The Chairman explained that no percentage of tax relief has been determined yet, noting that this has to be done through negotiations.

“We do not have a percentage amount yet because it is subject to negotiation. Any tax holiday that is less money to the treasury, so those who have the responsibility like the Finance Ministry and FIRS must have to agree to make it into a law. But we are going to use a benchmark of what other industry people are enjoying, and ask for similar treatment.”

Kofi Annan Promotes Science in Agriculture in Africa

Kofi Annan Highlights Science in Agriculture

BuaNews (Tshwane)
NEWS
17 July 2007
Posted to the web 17 July 2007
Nairobi
Former United Nations Secretary General Kofi Annan has highlighted the important role which science can play in boosting Africa’s agriculture sector and assist in ending poverty.

“I think that by working with all African scientists, we are going to make a difference and I am committed to working with you,” Mr Annan told farmers and scientists after visiting a maize farming project in western Kenya.

“We are all determined to work together to make sure that your work is as fruitful as possible and productive as possible and that you earn what you deserve,” in the international markets, he said at the weekend in Bungoma, about 330km north-west of the capital Nairobi.

The former UN Chief chairs the board of the Alliance for a Green Revolution in Africa (AGRA).

On Saturday, Kenyan President Mwai Kibaki allowed AGRA to set up its headquarters in Nairobi after talks here, a government statement said.

Mr Annan told President Kibaki that his group would lend Kenya $5-million (about R40-million) to boost the farming sector in the east African nation, home to about 33,5 million people and where at least 60 percent live on under a dollar a day.

Last month, Mr Annan was tasked with leading a $150-million drive to reverse the decline in the African farming sector.

Sub-Saharan Africa’s food production had been dropping for more than a decade, and a third of the continent’s population, or about 200 million people, suffer from hunger, he said at the World Economic Forum on Africa.

Mr Annan’s alliance includes African leaders, farmers, governments, donors, civic groups and private-sector entrepreneurs.

The alliance was set up last year with a $150-million grant from the Bill and Melinda Gates Foundation and the Rockefeller Foundation. It seeks to help millions of African subsistence farmers become competitive producers.

Mr Annan has said the alliance’s work would focus on developing resistant crop seeds, setting up irrigation systems, harnessing rain water and providing fertilisers, processing facilities and farming advice.

It is Easier to Do Business in Africa

It is Easier to Do Business in Africa

New Vision (Kampala)
DOCUMENT
16 July 2007
Posted to the web 17 July 2007
Kampala
ON June 27, Kampala hosted the 2007 Kikonyogo Capital Markets Award and Gerald Mahinda, Group MD East African Breweries gave the keynote speech. Below is the edited version:

DID you know that there were 193 countries in the world and 53 of them are in Africa? Africa’s land mass is greater than the US, Europe and China combined.

Nine hundred million people live in Africa and they speak over 1,000 languages – one estimate puts it closer to 2,000 – and most people speak at least two if not three or four languages.

Africa has four main economic hubs:

North Africa, that includes Egypt, Morocco, Libya and Tunisia is separated from the rest of the continent by the Sahara desert and have economies that are more closely linked with those of the Middle East and Europe than the rest of the continent.

Southern Africa includes Botswana, Namibia and South Africa, which is Africa’s largest economy.

West Africa – that includes Nigeria – which is Africa’s most populous country, with close to 140 million people.

And finally, East Africa, that includes Kenya, Tanzania and Uganda.

Let me focus on countries south of the Sahara, namely sub-Saharan Africa.

Is the time right for sub-Saharan Investment? What do most people think of when you mention Africa?

I think the following would probably spring to mind: wars, famine, disease, conflict, corruption, chaos, HIV/Aids, military dictatorship, political repression, and so on. In short, a difficult place to do business.

But we think that Africa faces a brighter future. Starting with wars, it is true – at least 22 sub-Saharan African countries or so around half the total – suffered wars during the 1990s. But between 1999 and 2005, the number dropped from 13 to four – allowing governments to focus more on development.

Most wars were civil and in fact there has not been a war between African countries since 2000, when the war between Ethiopia and Eritrea ended.

Turning to military dictatorships, it is true that from the early 1960s to the late 1980s, Africa had more than 70 coups and 13 presidential assassinations. But since then, many countries have been showing strong signs of progress towards democracy.

In 1973, only three African heads of state were democratically elected. Now that figure has risen to above 30 and infamous countries such a Zimbabwe are very much the exception as opposed to the rule, but on that point, I am not making a prediction – but do not write Zimbabwe off just yet. President Robert Mugabe’s elections are scheduled for 2008 and Zimbabwe has the highest adult literacy rate on the continent at 90%.

On HIV/Aids, it is true – Africa is by far the world’s most affected region and accounts for two-thirds of all people living in the world with HIV and Aids. It is a pandemic and overall, it is not getting better, but it is increasingly being recognised for what it is and a few countries have had some success in fighting the tide.

For example, Uganda’s policies are credited with helping to bring adult HIV prevalence down from around 15% in the early 1990s to less than 7% in 2005.

In Zambia, government initiatives to provide anti-retroviral drugs appear to be stabilising infection rates. And in Kenya, there are now 350 voluntary testing centres.

So Africa is not an easy place to do business? It is true, but last year the World bank and IFC issued their “Doing Business report 2007″ in which Africa moved from the last place to third in the rankings for reforms that encourage new business.

In all, 45 regulatory changes in 30 countries reduced the time, cost and hassle for businesses to comply with legal and administrative requirements.

These included simplified business regulations, strengthened property rights, eased tax burdens and increased access to credit.

So taken as a whole, we think the picture is improving and we believe that a wind of change is blowing across the continent.

The writer is the Group Managing Director, East African Breweries Limited

Africa Encouraged to Create More Jobs to Stimulate Economy

Create More Jobs, Museveni Tells MPs

New Vision (Kampala)
NEWS
16 July 2007
Posted to the web 17 July 2007

By Alfred Wasike
Kampala
RICH markets and a population with a purchasing power are a vital stimuli to economic growth, President Yoweri Museveni told the NRM MPs attending a retreat at the National Leadership Institute, Kyankwanzi.

Museveni was presenting a paper titled “Employment creation, markets and attracting investments.”

He urged the NRM leaders to create jobs in order to export to richer markets and eliminate bureaucracy in order to attract investors.

He encouraged the Government officials to lobby for more tariff and quota-free markets in other parts of the world.

The President was concerned that the African markets were small.

“The problem with our markets in Uganda and Africa is that they are small. Look at Africa’s U.S.$550 million market compared to the United States of America’s U.S.$11 trillion market.”

Museveni noted that the low level of urbanisation on the continent was another cause of poverty.

“Low levels of urbanisation are a serious problem. Look at Uganda with only 15% of its population living in urban areas while the rest are in the rural areas with very weak or no purchasing power.”

In regard to the Tri-Star Apparel factory, he said: “I helped to establish Tri-Star to have a basis of boosting the garment industry in Uganda. It had problems but we shall keep trying to help our industries take off. You remember in the 1980s when Ugandans used to drink powdered milk from Denmark?

The NRM Government took the initiative and now there is plenty of fresh milk for everyone. Look at petroleum, we took our time training our scientists and now we are on top of the situation. That is how the NRM works. We are focused, we may seem to take time but we achieve our targets,” he affirmed.

The former U.S. trade representative for Africa, Rosa Whitaker, an architect of the African Growth Opportunity Act (AGOA), thanked the President for supporting the initiative.

“The labour movement in the U.S. was opposed to the creation of Agoa. They argued that it will take away American jobs to Africa. But I assure you that Agoa would not have been possible without President Museveni. He came to the U.S. and lobbied vigorously for it. He was the first African president not only to read the entire text but also to endorse it,” she said.

ADB President Visits Libya

Official Visit of President Kaberuka to Libya

African Development Bank (Tunis)
PRESS RELEASE
16 July 2007
Posted to the web 17 July 2007
Tunis
The President of the African Development Bank Group (ADB) will be on a two-day official visit to Tripoli, Libya, starting 15 July 2007.

During this visit, the first by an ADB President for fifteen years, Mr.Kaberuka will have a series of discussions with the country’s highest authorities.

The African Development Bank and Libya are key movers in African integration and the social and economic development of the continent.

President Kaberuka’s visit will be an opportunity to explore ways and means of enhancing the cooperation between the two parties toward their common goals in Africa.

Libya is a prominent regional member country of the African Development Bank. Its substantial financial resources, generated primarily by oil exports, have enabled the country to opt to finance its economic and social development without recourse to ADB resources.

Cooperation between ADB and Libya has thus hitherto concerned only the non-lending instruments of the African finance institution. The two parties are currently taking steps to strengthen their cooperation ties.

Possible priority areas of this joint effort are economic and sector studies that could translate into banking, financial and sector reforms, in order to improve the country’s macro-economic management and promote the development of infrastructure (water, sanitation, transport, etc.).

As the principal source of development expertise in Africa and the premier African development finance institution, ADB is ready to assist the Libyan government in its efforts to modernize and raise the competitiveness of its economy. ADB support could initially concern technical assistance and the building of capacities for formulation of sector development policies.

Since the start of its operations on the continent in 1967, the African Development Bank has financed over 3 250 projects in favor of its regional member countries for a cumulative total of approximately 60 billion dollars, to contribute to their economic and social development.

Its share ownership comprises 53 African countries, including Libya, and 24 regional countries (America, Asia, Europe). With a Gross Domestic Product of some 35 billion US dollars in 2005, Libya has the highest per capita income in Africa, which is almost 7000 dollars.

African Development Bank (ADB) Seeks to Strengthen Ties With Libya

Cooperation Between ADB And Libya

African Development Bank (Tunis)
PRESS RELEASE
16 July 2007
Posted to the web 17 July 2007
Tunis
Libya is a prominent African development Bank member country. With 3.651 % of the institution’s voting powers, it ranks as a leading African shareholder of the ADB, confirming its keen interest in the continent’s socio-economic development.

Though it has been an ADB shareholder since July 1972, Libya is the only regional member that opted not to use ADB resources in financing its development. This choice was justified by the country’s sound financial situation, as one of the countries with the highest macroeconomic indicators, posting a Gross Domestic Product in the order of 35 billion dollars for 2006, and a per capita income of approximately USD 7 000. It also conveys Libya’s constant desire to show solidarity with the other countries on the continent, especially the most disadvantaged.

This concern for concerted and accelerated development of Africa explains Libya’s interest in strengthening cooperation between the nations of Africa, from North to South and from East to West, as well as promoting and developing regional integration.

Shared Commitment of ADB and Libya to Support Africa’s Development and Regional Integration

Founded in 1963, as part of the impetus for the establishment of the Organization of African Unity (OAU), the African Development Bank (ADB) is an African initiative intended to support the economic and social development of African states, individually and collectively and thereby promote regional integration. Though OAU and ADB have no direct affiliation links, their objectives concerning the African populations are complementary from political and economic standpoints.

As a front-line member of the OAU and of ADB, Libya has been at the root of several initiatives to promote economic growth and further integration on the continent, with the aim of curbing the poverty prevailing in several countries and in its sub-regions, and intensifying its development. This concern shared with the African Development Bank, whose core mission is “to contribute to the economic development and social progress of its regional member- individually and jointly”, fuels ADB/Libya cooperation.

With over 3 250 projects financed in Africa since 1967, when it started its operational activities, for a cumulative commitment of 60 billion dollars, ADB has acquired sound experience in the analysis, study, financing and implementation of economic and social development projects in all its 53 regional member states, as well as several regional integration projects.

ADB, as a continental finance institution, has become the principal partner of all the cooperation and regional integration organizations, such as the New Partnership for Africa’s Development (NEPAD), the Community of Sahelo-Sahelian States (Cens-Sad) established in 1998 on Libya’s initiative and headquartered in Tripoli, the Economic Community of West African States (ECOWAS), the West African Economic and Monetary Union (WAEMU), the Southern African Development Community (SADC), The Common Market of East and Southern African States (COMESA), The Economic Community of Central African States (CEEAC), the Arab Maghreb Union (AMU) and the Economic Community of East African States (ECEA).

To contribute to the attainment of the key objectives of these regional integration agencies, ADBhas also provided its financial and technical support to their development finance instruments, particularly the Eastern and Southern African Trade and Development Bank (PTA Bank), the West African Development Bank (WADB), the Bank of Central African States (BEAC), the East African Development Bank (EADB) and the Development Bank of Southern Africa (DBSA).

Prospects of Cooperation between ADB and Libya

ADB in 2006 conducted two studies for the Libyan Government concerning the Libyan banking sector and the development of the water sector respectively. It has also processed a project for a gas pipeline linking Tunisia and Libya.

As Africa’s premier regional development finance institution, the African Development Bank is prepared to cooperate actively with Libya, which is spearheading regional integration initiatives in Africa, to promote the development of the entire region. The ADB can enable Libya to benefit from its expertise in key areas of development of African countries and assist it in designing and implementing reform programmes in different spheres of its economic and financial management: banking and finance reforms, the enhancement of the business framework and environment that is indispensable for the promotion of a dynamic private sector, improvement of strategies and policies to support the development of small and medium-sized enterprises, privatization of public enterprises, infrastructure (roads, railways, electricity, water supply, sanitation), etc.

The cooperation prospects currently being discussed notably concern the conduct by ADB of a number of economic and sector studies in the priority areas identified by the country and the Bank. This cooperation could range from direct financing of private enterprises to technical assistance, and include institutional support or advice for formulation of private sector support policies.

ADB is moreover prepared to provide financial support for the implementation of the Libya-Tunisia gas pipeline project and the RASCOM telecommunication project, to be executed under the leadership of RascomStar-Qaf, the first pan African telecommunications operator with majority shares held by the portfolio of Libyan investments in Africa and Société générale libyenne des postes et télécommunications, in conjunction with Regional African Satellite Communication Organization (RASCOM) and Thales Alenia Space.

The African Development Bank is also ready to make its expertise and tools available for Libyan initiatives aimed at bolstering African Unity and regional cooperation. For example, thought is being given to the possibility of ADB, which has already built up an impressive stock of trust among the other African countries, serving as an intermediary for Libya’s development financing in Africa, for example through the establishment of a Libyan technical fund hosted by the African Development Bank.

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